What Forms Do I Need for Bankruptcy?

by ECL Writer
What Forms Do I Need for Bankruptcy?

Navigating the complex terrain of bankruptcy can be overwhelming, especially when faced with a myriad of forms and paperwork. Whether you’re considering Chapter 7 or Chapter 13 bankruptcy, understanding the necessary documentation is paramount to a smooth process. In this comprehensive guide, eastcoastlaws.com delves into the essential forms required for bankruptcy filings, providing clarity amidst the confusion.

From the initial petition to detailed financial disclosures, each form serves a crucial purpose in assessing your financial situation and determining eligibility for bankruptcy relief. We’ll explore the key forms individuals need to gather, fill out, and submit to initiate the bankruptcy process successfully.

Whether you’re seeking professional assistance or tackling the paperwork solo, arming yourself with knowledge about the required forms empowers you to take control of your financial future. Join us as we unravel the intricacies of bankruptcy paperwork and equip you with the information needed to navigate this challenging terrain with confidence.

Filing for Bankruptcy

Through bankruptcy, a person can have a fresh start and be released from liability for qualified debt. When a debtor files a completed petition with the bankruptcy court, disclosing all relevant financial information—income, debt, assets, and financial transactions—the process officially begins.

Forms Required in Bankruptcy

In bankruptcy proceedings, several forms are typically required to be filed with the bankruptcy court. The exact forms may vary depending on the type of bankruptcy (Chapter 7, Chapter 11, Chapter 13, etc.) and jurisdiction, but some common forms include:

  • Voluntary Petition: This form initiates the bankruptcy process and provides basic information about the debtor, including their name, address, and the type of bankruptcy they are filing for.
  • Schedules of Assets and Liabilities: These schedules list all of the debtor’s assets and liabilities, including property, debts, income, and expenses.
  • Statement of Financial Affairs: This form requires the debtor to disclose details about their financial history, such as income, expenses, transfers of property, and lawsuits.
  • Means Test Calculation: For Chapter 7 bankruptcy, debtors must complete a means test calculation to determine if they qualify for Chapter 7 based on their income and expenses.
  • Statement of Intention: This form indicates whether the debtor intends to keep or surrender secured property, such as a house or car, in the bankruptcy process.
  • Proof of Credit Counseling: Debtors are required to complete credit counselling before filing for bankruptcy and must submit proof of completion to the court.
  • Plan of Reorganization: In Chapter 11 and Chapter 13 bankruptcies, debtors must propose a plan to repay creditors over time. This plan outlines how debts will be repaid and must be approved by the court.
  • Statement of Current Monthly Income: This form is used to calculate the debtor’s current monthly income, which is important for determining eligibility and repayment plans in Chapter 7 and Chapter 13 bankruptcies.
  • Notice of Commencement of Case: This form notifies creditors and other parties of the commencement of the bankruptcy case and provides information about important deadlines and hearings.

The Petition (Bankruptcy Form 101)

The initial form where you provide your name and address is called the Voluntary Petition for Individuals Filing for Bankruptcy (voluntary petition). This is also the point at which you declare that you intend to file under Chapter 7, offer details about the type of debts you have (enterprise or consumer), an estimate of the number of creditors, assets, and obligations, and any bankruptcies you have filed in the previous eight years.

Before filing for Chapter 7 bankruptcy, you have to finish a credit counselling program through an authorized provider. In your petition, you will state that you have completed the required steps and enclose a copy of your completion certificate.

Your Property (Bankruptcy Form 106A/B)

You declare any ownership interests you may have in both real and personal property on Schedule A/B: Your Property. Your home, apartment building, plot of land, or any other kind of real estate you own is considered real property. Provide information about the property’s location and description, the kind and amount of your interest, and the total number of secured claims (such mortgages or other liens) that encumber the property while filling out Schedule A/B.

You also have to include a list of all of your personal property (i.e., property other than real estate) on Schedule A/B. Cash, bank accounts, furniture, clothes, insurance, stocks, bonds, annuities, retirement accounts, vehicles, musical instruments, and any other valuable object are examples of assets.

Your Exempt Property (Bankruptcy Form 106C)

In a Chapter 7 bankruptcy, certain property, known as “exempt” property, can be retained by the filer. However, nonexempt assets may be sold by the appointed bankruptcy trustee to repay creditors. Each state, as well as the federal system, has its own set of bankruptcy exemptions, with some states permitting the use of federal exemptions.

Schedule C is a crucial document in your bankruptcy petition, where you declare and claim exemptions for each listed asset. It’s essential to accurately determine the available bankruptcy exemptions and thoroughly research them. If uncertain about whether your property qualifies as exempt, consulting a local bankruptcy attorney is advisable.

Debts Secured By Property (Bankruptcy Form 106D)

You include a secured claim (a debt or obligation for which you have pledged a piece of property as collateral) in Schedule D: Creditors Who Have Claims Secured by Property. Refusing to make the payment is known as “defaulting,” and it gives the creditor the legal authority to reclaim the asset through seizure or foreclosure. Secured claims are most commonly associated with mortgages and auto loans.

Include the creditor’s name and contact details, the type and amount of the lien, the date it was incurred, and the description and market value of the property that is subject to the lien when filling out Schedule D. Indicate the difference in the unsecured component column if the lien amount is greater than the property’s worth.

Unsecured Debts (Bankruptcy Form 106E/F)

Schedule E/F: Creditors Who Have Unsecured Claims is where you document remaining debts, like credit card bills, personal loans, and medical expenses. You also include claims that aren’t dischargeable in bankruptcy, known as “priority claims,” such as certain taxes and domestic support obligations like alimony or child support.

The schedule provides instructions on what constitutes priority debts. If you believe only a portion of a creditor’s claim deserves priority, you still disclose the entire claim but specify the non-priority portion in the appropriate column.

It’s crucial to list all debts in your bankruptcy schedules, even those you intend to repay. Failure to include a debt could result in it not being discharged in bankruptcy. It’s advisable to review your debts thoroughly, cross-referencing with your credit report to ensure nothing is overlooked.

Deficiency balances after foreclosure or repossession are also listed on Schedule E/F. When a secured lender sells your property to satisfy the debt but the proceeds don’t cover the loan balance, leaving you responsible for the difference, it becomes an unsecured debt. This applies regardless of whether you can be held liable for the deficiency under your state’s laws.

Executory Contracts and Unexpired Leases (Bankruptcy Form 106G)

Schedule G in bankruptcy filings is where you disclose any executory contracts and unexpired leases that you’re currently bound to with a lender. These could include agreements like car leases, rental contracts, real property leases, license agreements, real estate purchase contracts, or personal property leases.

When you file for bankruptcy, these contracts and leases become part of the bankruptcy estate, and the trustee overseeing your case has the authority to decide whether to assume or reject them. If the trustee believes that assuming the contract or lease will benefit your creditors, they may choose to do so. However, if there’s no clear benefit or if the terms are unfavourable, the trustee will likely reject it.

As the debtor, you have the option to indicate your intentions regarding these contracts and leases in your Statement of Intention for Individuals Filing Under Chapter 7 form. You can choose to assume the contract if you want to continue with it or reject it if you wish to terminate it. Ultimately, the fate of these contracts and leases in bankruptcy depends on whether they are seen as valuable assets for your creditors or liabilities that should be shed to facilitate your financial restructuring.

Your Codebtors (Bankruptcy Form 106H)

You list codebtors on any of your obligations in Schedule H: Your Codebtors. However, bear in mind that your discharge simply releases you from your debt—your codebtor remains liable. Even after you file for bankruptcy relief, your creditors are still able to pursue your codebtors.

Your Income (Bankruptcy Form 106I)

You provide your income and employment details on Schedule I: Your Income. Remember that you still need to include your non-filing spouse’s income on Schedule I if you are married but filing for bankruptcy without them. Learn how to be eligible for bankruptcy by applying the marital adjustment.

Your Expenses (Bankruptcy Form 106J)

Together with Schedule I, Schedule J: Your Expenses provides the court with information about your monthly spending plan. Your monthly expenses will be listed on Schedule J. To find your monthly disposable income, the amount on Schedule J will be subtracted from the net income shown on Schedule I.

The Effect of Your Disposable Income

A passing score on the means test is a prerequisite for filing for Chapter 7 bankruptcy (explained below). However, if your budget indicates that you have a sizable amount of disposable money each month, the court may nonetheless decide that you are ineligible for Chapter 7 bankruptcy even if you pass the means test. If you and your spouse do not share a residence, you can file Schedule J-2 (expenditures for Separate Household of Debtor 2) to claim the additional living expenditures as a tax deduction.

A Summary of Your Assets and Liabilities and Certain Statistical Information (Bankruptcy Form 106Sum)

The culmination of your financial disclosure lies within this comprehensive form, offering the court and trustee a succinct overview of your entire monetary landscape. Through meticulous completion of Schedules A through J, encompassing every asset, liability, and expense, you compile the vital data required for this summary.

This form serves as the nexus, where each detail converges into a coherent portrayal of your financial standing. It is the culmination of diligence and transparency, providing a snapshot that illuminates your fiscal reality with clarity and precision.

Declaration About an Individual Debtor’s Schedules (Bankruptcy Form 106Dec)

Once your bankruptcy schedules are finished, you must sign this form attesting that the information you provided is true and accurate to the best of your knowledge. Remember that you are signing this statement under threat of being found guilty of perjury. Lying on your bankruptcy paperwork carries the risk of having your case rejected without a discharge and putting you in danger of being charged with bankruptcy fraud.

Your Statement of Financial Affairs for Individuals Filing for Bankruptcy (Bankruptcy Form 107)

The Statement of Financial Affairs for Individuals Filing for Bankruptcy, often referred to as the “SOFA,” serves as a comprehensive document, furnishing the court with crucial insights into your financial history. Covering a spectrum of financial activities, it demands meticulous attention to detail.

From past income to creditor payments, lawsuits, property transactions, and business affairs, each query holds significance in painting a holistic picture of your financial situation. Precise and truthful responses are paramount, ensuring transparency and compliance with legal requirements. Scrutiny of each question is advised to provide accurate and complete information, facilitating a smooth and fair bankruptcy process.

Statement of Intention for Individuals Filing Under Chapter 7 (Bankruptcy Form 108)

The Statement of Intention is where you notify the creditor and the court what you intend to do with the debt and the property if you have any secured obligations, executory contracts, or unexpired leases. You have to say whether you want to keep the property or give it up for secured debts. Indicate if you want to redeem the property or reaffirm the obligation if you decide to keep it.

Surrendering Property

You can walk away by giving up the item to the creditor if you decide you no longer wish to keep it, such as a car or house. In essence, you return the property to the creditor when you surrender it. The discharge will eliminate your liability for the loan, so you won’t have to worry about the creditor pursuing you to collect a shortfall (which happens when the auction price is less than what you owe) if the property cannot be sold for enough money to cover the loan.

Reaffirming or Redeeming the Debt

Reaffirming a debt in bankruptcy means agreeing to be personally liable for it again, despite the discharge. This decision shouldn’t be taken lightly, as it forfeits the benefit of discharge. If unsure, consulting a bankruptcy attorney is wise. It’s generally unwise to reaffirm if debt greatly exceeds collateral value.

Alternatively, you can redeem the property by paying its replacement value in one lump sum. This removes the creditor’s lien, leaving you with clear ownership. However, it’s often impractical due to the required lump sum and limited applicability.

Chapter 7 Statement of Your Current Monthly Income and Means Test Calculation (Bankruptcy Forms 122A-1, 122A-1Supp, 122A-2)

Chapter 7 bankruptcy eligibility hinges on the means test, which assesses if a debtor’s disposable income is sufficiently low. This test compares the debtor’s average gross monthly income over six months before bankruptcy to the median income for a similar household size in their state.

If the income falls below the state median, the debtor passes automatically, bypassing the second form. However, if the income exceeds the median, the debtor must complete the second form, detailing expenses to determine eligibility. This process ensures that those truly unable to repay debts can benefit from Chapter 7 relief while preventing abuse of the system.

Notice Required by 11 U.S.C. § 342(b) for Individuals Filing for Bankruptcy (Bankruptcy Form 2010)

This form aims to inform individuals about services offered by credit counselling agencies, the various types of bankruptcy applicable to individuals, and the consequences of engaging in bankruptcy-related crimes. By providing this information, the form educates individuals on available resources for financial assistance, empowers them to make informed decisions regarding bankruptcy options, and underscores the seriousness of adhering to legal and ethical standards throughout the bankruptcy process.

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